(i) Marginal Cost: Marginal cost is the cost of producing one additional unit of a product. The concept of marginal cost is very useful in making managerial decisions concerning price fixation, make or buy decisions, etc. 

It can be shown as: 

For example: The marginal cost of 4th unit is the change in total cost when output is increased from 3 units to 4 units. 

(ii) Opportunity Cost: Opportunity cost means the benefit sacrificed for selecting a particular course of action. It is the maximum advantage that could be obtained if the resource was put to an alternative use. The opportunity cost of producing one commodity A is the amount B that must be sacrificed in order to use resources to produce A rather than B. In other words, the opportunity cost of anything is the next best alternative that, could be produced instead by the same factors or by an equivalent group of factors costing the same amount of money. For example, a firm buys a machine for Rs. 25,000. This amount could be invested in shares or debentures. The loss of dividend or interest that could be earned is the opportunity cost. Opportunity cost is not recorded in books. It is useful in comparing alternatives and in making decisions.